Tail Wagging the Dog

March 27 (Bloomberg) -- America's financial system faces its biggest overhaul
since the Great Depression as officials weigh lessons from the credit-market
rout and the near collapse of Bear Stearns Cos.

Federal Reserve policy makers are redefining which companies are vital to
the flow of credit, an area once the sole domain of commercial banks, and which
institutions pose risks to the entire economy if they fail. Treasury Secretary Henry
Paulson said in a speech yesterday that the Fed should broaden its oversight
to include Wall Street investment firms, now regulated by the Securities and
Exchange Commission.

Former regulators predict the changes will see the Fed accrue influence at
the expense of the SEC, which was created by President Franklin Roosevelt to
make rules for dealers and stock exchanges. The Fed is taking almost $30 billion
in assets off Bear Stearns's balance sheet to encourage JPMorgan Chase & Co.
to buy the firm, even though Bear's main supervisor is the SEC.

"This is tectonic," said Ralph
Ferrara, a former general counsel at the SEC, and now a partner at Dewey & LeBoeuf
LLP in Washington. "We no longer want to have a balkanized response to a
national crisis."

My Thoughts:

The Federal Reserve, a private banking institution authorized by Congress
to loan money created from nothing and charge interest for doing so, is already
a powerful, rouge institution that operates without Congressional oversight.
Should we now hand them more power?

The Fed's latest "unprecedented" act of lending of money directly to investment
banks (swapping treasuries for valueless garbage) and their recent creation
of the a) Term Auction Facility b) Term Securities Facility and c) Primary
Dealer Credit Facility are all confirmation as to where their loyalties lie
(not the people) -- and their mischievous, manipulative, rouge ways of supporting
their brethren.

Additionally, the bailout of a private company (Bear Stearns) with US taxpayer
money, without Congress's approval, is unfathomable -- Who is in control of
these guys (shareholders? -- see my note towards bottom of post)

So, the question of the day: does the dog (our government) wag the tail (fed)
or does the tail (fed) wag the dog (government)? I think the answer is crystal
clear...

If the American people ever allow private banks to control the issue
of their currency, first by inflation, then by deflation,(i.e., the "business
cycle") the banks and corporations that will grow up around them will deprive
the people of all property until their children wake-up homeless on the
continent their fathers conquered.

Thomas Jefferson, President of the United States 1801-1809

I believe that banking institutions are more dangerous to our liberties
than standing armies.

Thomas Jefferson,1816

We have come to be one of the worst ruled, one of the most completely
controlled and dominated, governments in the civilized world - no longer
a government by free opinion,no longer a government by conviction and the
vote of the majority, but a government by the opinion and the duress of
small groups of dominant men.

Woodrow Wilson, President of the United States 1913-1921

(Note: Federal Reserve's controlling stock is owned by: Rothschild Banks of
London and Berlin, Lazard Brothers Bank of Paris, Israel Moses Sieff Banks
of Italy, Warburg Bank of Hamburg and Amsterdam, Lehman Brothers Bank of New
York, Kuhn Loeb Bank of New York, Chase Manhattan Bank of New York and Goldman
Sachs Bank of New York)

"The banker's credit money system is now everywhere as are their resultant
unsustainable debts; and those who profit by that system, the bankers (and
the corporations that grew up around them) now control the media, the political
process, and the agencies charged with overseeing and regulating the economy
- the US Federal Reserve Bank, the SEC, the US Treasury, and indeed the
US government itself: the Presidency, the Congress, and the Supreme Court."

Disclaimer: These articles merely reflect the opinions of this author
and are by no means a guarantee of future economic conditions. Though the author
strives to provide accurate and relevant data, he sometimes relies on external
sources and cannot assure the reader of the accuracy contained within. Additionally,
these articles are provided for INFORMATIONAL PURPOSES ONLY and are NOT MEANT
to provide investment advice to anyone. For investment advice, please consult
with your professional financial planner.